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Senator Flanagan Opposes Kings Park Psychiatric Center Lawsuit

John J. Flanagan

February 24, 2006

Senator John J. Flanagan (2nd Senate District) today criticized the recent lawsuit filed by The Arker Companies and Cherokee Northeast, LLC against the State of New York in their effort to force Empire State Development (ESD) to close on the sale of the former Kings Park Psychiatric Center (KPPC). In a letter to ESD Chairman Charles Gargano, Senator Flanagan formally requested the State and ESD to vigorously defend the Kings Park community against the legal action undertaken by the development team.

Senator Flanagan’s request was in response to Cherokee Arker’s announcement that they had formally filed a claim in Supreme Court after ESD’s January 13th decision to cancel the sale of the KPPC property. The cancellation came after months of strong opposition from Senator Flanagan and the Kings Park community.

"This lawsuit has no merit,"said Senator Flanagan. "Despite Cherokee Arker’s statements that they want to work in the best interests of the community, a lawsuit which forces the community’s acceptance of overdevelopment cannot be considered in their best interests. Over the last ten months, Cherokee Arker had every opportunity to demonstrate their commitment to the Kings Park residents, the school district, the Town of Smithtown and this office, but they failed miserably. I stand by ESD’s decision to cancel the sale of KPPC and to allow the community to decide for itself what’s in their best interests."

As the third bidder for the KPPC property, Cherokee Arker quickly drew criticism from the community after proposing 1800 units of high density housing for the site. Despite repeated requests by Senator Flanagan to withdraw the 1800 unit proposal, to publicly commit to continuation of tax payments to the Kings Park School District, and to do more community outreach, Cherokee Arker did little to gain credibility or favor with residents, elected officials or civic organizations.

In January, at Senator Flanagan’s request, ESD terminated the State’s contract with Cherokee Arker when questions regarding the redevelopment plans were not answered to the community’s satisfaction.

Since the cancellation of the sale, Senator Flanagan has regularly met with civic leaders, State, County and Town officials, planning directors, environmental advocates and residents to explore alternative redevelopment options for the site. The Senator has also met with representatives from ESD, the Senate Finance Committee and the Governor’s Office to pursue funding for the millions of dollars in cleanup costs for the property.

"I am confident that the Court will uphold ESD’s cancellation of the KPPC sale under the provisions of the purchase and sale agreement", said Senator Flanagan. "It is also my hope that the Court will move as expeditiously as possible to resolve this action so that the people of Kings Park can move forward with the redevelopment process. I stand with the Kings Park community and their right to decide their own future."

This is written to express my strong disappointment and displeasure over the litigation undertaken by The Arker Companies and Cherokee Northeast against Empire State Development (ESD) regarding the potential sale of Kings Park Psychiatric Center (KPPC). From all accounts, the lawsuit has no merit and is nothing more than a waste of taxpayers’ time, and more importantly, their money.

For Cherokee Arker to now assert that this lawsuit preserves their rights under the contract is disingenuous at best, and is an affront to the State of New York, the Town of Smithtown and the hardworking taxpayers of Kings Park by perpetuating what amounts to a frivolous fraud. We have every confidence in ESD’s ability to vigorously defend this action and believe firmly in the integrity and fairness of the judicial system that the facts will ultimately bear out the truth -- facts that were always known and agreed to by both parties and their counsel.

At every stage of the bidding and contractual process, Cherokee Arker was well aware of the State’s ability to withdraw from the sale at any time up until closing on the property. In fact, language in the Invitation to Bid expressly stated that no bid for the property was deemed accepted until a closing actually occurred. Moreover, expressed provisions of the purchase and sale agreement clearly limited any recovery for a default by the State to an unmistakable return of the bidder’s deposit plus interest -- no more, no less. To suggest otherwise, not only demonstrates bad faith but displays greed and arrogance.

The recent press statements from Cherokee Arker that upon resolution of the lawsuit they look forward to working with the community to develop the property in the best interests of all parties, and in particular the community, are both ridiculous and insulting. For more than ten months prior to the termination of their bid, my office had repeatedly urged them to conduct extensive public outreach and solicit input on redeveloping the Kings Park site. Instead, they ignored and stalled for months until eventually relenting late in the process by sponsoring a meaningless "advertorial campaign" in the local papers. No sincere public outreach or input was ever solicited, and the only true interests exhibited by Cherokee Arker were their own.

We stand ready to assist Empire State Development in vigorously defending this lawsuit and look forward to continuing our ongoing discussions regarding the future reuse of this property, one that is both economically and environmentally positive for the Kings Park residents. We also thank you and your staff for devoting countless time and effort toward achieving an outcome that truly reflects the best interests of the people living and working in Kings Park.